"This early prototype has a number of ports that we're used to seeing more commonly on computers than on mobile devices, including USB ports, an Ethernet port, and even a serial port. Apple never intended for all of these to make it into the final product, of course - our source said that because this was a development prototype, ports like Ethernet and serial were included simply to make working on the device easier." Fascinatingly awesome.

The iPhone actually began as a tablet project. Indeed, Apple Senior Vice President of Worldwide Marketing Phil Schiller testified that the success of the iPod and the disruptive effect it had on the music industry prompted Apple to think about what other industries it could tackle.

The iPod, Schiller explained, "really changed everybody's view of Apple both inside and outside the company." Schiller said that as ideas were tossed about regarding Apple's next leap, everything was fair game, with some at the company going so far as to suggest Apple look into developing a stand-alone camera, or even a car.

But once some of the more grandiose ideas began to dissipate, the Apple brain trust began focusing their attention on creating a tablet.

This is just a generic ARM development board installed on a touch screen kit. It's not a phone, it has no battery, wifi, or bluetooth, how can it be an "iPhone prototype"? It isn't a prototype of nothing - or everything, depending on how you see the world.

There is nothing to identify this as coming from Apple, or even used by them. Actually it seems barely used at all. It's obvious that Apple had to start from something like this, there's nothing to be excited about.

It's not a prototype. You can't buy an industrial engine, strap it to a wooden chassis and call it a Ferrari prototype. At most, this was just used to port the OS and test the GUI (but you could do the same on a PC with a touch screen attached).
It may have some historical interest, but as there isn't anything to identify it as being used from Apple, its value is null. Assuming it's not an hoax, of course.